Treasury Department Previews FATCA Guidance for Banks that Report Directly to IRS

By Brian Monroe

The U.S. Treasury Department published a preview of upcoming guidance Tuesday for financial institutions that have agreed to report to the Internal Revenue Service on their American clients. In a notice, the IRS outlined how it expects banks that have entered into so-called Model 2 intergovernmental agreements to comply with the Foreign Account Tax Compliance Act (FATCA). Banks that have signed FATCA agreements must implement due diligence controls and report to the tax agency beginning July 1 or pay withholding taxes on related transactions. The department will finalize Tuesday's draft guidance by December 31, according to a statement. Under the...